Financially strapped district searches for way to fill $3 million budget gap

School cutbacks worry educators

Posted: Thursday, February 10, 2000

By SHANA LOSHBAUGHPeninsula Clarion

The mood was grim Tuesday at the Kenai Peninsula Borough School District's first public hearing on the budget for the next school year.

About two dozen people -- most of them school employees -- gathered at the Soldotna High School library to hear about the district's budget gap and planned cutbacks.

School board member Nels Anderson said the yearly cuts are doing real damage, compromising education, deleting jobs and programs.

"It is not fat," he said.

He said that the cutbacks and legislation so far have failed to solve underlying school funding problems.

"We've been buying one year at a time," he said.

The meeting was the first of a series of public hearings around the peninsula to discuss school finances. Wednesday evening, the administration met with the community in Seward.

Tonight's meeting is at Nikiski Middle-Senior High School at 7. Friday's meeting is at Kenai Central High School at 7 p.m. Monday, the final hearing is scheduled at Homer High School at 7 p.m.

Assistant Superintendent Patrick Hickey, the district's business manager, outlined the challenge to the audience.

The district is looking at about a $3 million gap between projected revenues (about $73 million) and expenses for the 2000-01 school year, based on the current year's programs, he explained. In addition, the district probably will fail to meet new state criteria requesting that at least 70 percent of expenditures be tied to classroom instruction.

The volunteer budget committee and the school board have hashed out a list of cutbacks, including cutting teachers, increasing class sizes for teens, reducing travel, reducing middle school services, minimizing high school nursing services, deleting community schools funding, trimming central office staff and changing bookkeeping practices. The proposals would eliminate 16.5 jobs and downgrade others.

Hickey said the changes also will mean older equipment will not be replaced as quickly.

But those cuts still leave a gap.

"We're still $252,000 away from a balanced budget," he said.

Hickey explained how diverse factors have combined to deplete the district's finances.

He cited declining enrollment, increasing employee medical expenses and cost-of-living wage increases. State law restricts the amount of revenue the schools may receive.

"It is extremely complex," he said. "People have a real hard time understanding the size of the numbers."

The size of the gap is not the only problem.

The Legislature passed school reforms in 1998 requesting that most education expenditures go directly into classroom instruction. The guidelines are being phased in over three years. For the 1999-2000 school year, the cutoff was 65 percent.

"Fourteen districts flunked last year," Hickey said.

Next year, districts must spend at least 70 percent of funds on a list of accounts the state deems directly related to instruction. The peninsula district is at 68 percent, he said.

If districts fail to meet the goal, the state can grant a waiver -- or cut off funds.

For area schools, principals make the difference.

The Legislature counts them as administrative overhead. The Alaska Association of School Boards is lobbying for a rule change to classify them as instructors.

"If they pass the rule for principals, we'll be compliant, and I'll sleep nights," Hickey said.

The audience did not suggest any further cuts but expressed interest in raising revenues and enlisting more support from the Legislature.

Hickey told them that two measures under consideration could benefit peninsula schools. One is a bill proposed by Sen. Gary Wilken, R-Fairbanks, to raise the base allocation by $50 per student. Another is Gov. Tony Knowles' proposal to increase grant funding under the Quality Schools Initiative by $36 per student.

But the educators and others in the room were skeptical of getting any more money from the state.

"I've been to Juneau. I know our legislators," said Steve Wright, a custodian at Kalifornsky Beach Elementary. "If you are hoping for help from these people, you are out of luck."

Anderson agreed.

"The Legislature is bound and determined to cut the budget regardless of the implications," he said.

Even more severe cuts may lie ahead.

"We have to consider the 10 mill initiative," Hickey said, referring to a pending ballot measure to cap property taxes around the state. Such a move could limit borough funding for the district in the future, he said.

To cut expenses next year, the district plans to postpone payments and textbook purchases, a move that will roll $800,000 in expenses into the 2002 fiscal year.

The district administration is already talking about potential cuts two years down the road, including closing Nikiski Elementary School, turning school pools over to the borough to manage, reducing athletic programs and having small schools share principals.

Hickey was pessimistic about both the impact on students and the long-term financial outlook.

"Please remember that those of us doing this have children," he told the audience. "There is nobody who hopes I'm wrong more than me."